Campbell v. City of L. A.

903 F.3d 1090

Daniel CAMPBELL; et al,

Plaintiffs-Appellants,

v.CITY OF LOS ANGELES, Defendant-Appellee.

Cesar Mata, Plaintiff,

and

Richard D. Alba; et al., Plaintiffs-Appellants,

v.City of Los Angeles, Defendant-Appellee.

No. 15-56990

No. 16-55002

United States Court of Appeals, Ninth Circuit.

Argued and Submitted November 8, 2017 Pasadena, California

Filed September 13, 2018

Gregory Glenn Petersen (argued), Gregory G. Petersen A Law Corporation, Santa Ana, California, for Plaintiffs-Appellants.

Brian P. Walter (argued), Geoffrey S. Sheldon, David A. Urban, and Danny Y. Yoo, Liebert Cassidy Whitmore, Los Angeles, California; for Defendant-Appellee.

Before: Richard Linn,^** Marsha S. Berzon, and Milan D. Smith, Jr., Circuit Judges.

BERZON, Circuit Judge:

The present appeal arises from the decertification of a pair of related collective actions brought under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 207. Between 2004 and 2009, roughly 2,500 officers ("the Officers") of the Los Angeles Police Department ("the Department") opted into two collective actions alleging a pervasive, unwritten policy discouraging the reporting of overtime. After notice to potential collective action members and several years of discovery, the government defendant, the City of Los Angeles ("the City"), moved for decertification of the collective actions on the ground that the Officers within each were not "similarly situated" within the meaning of section 16(b) of the FLSA, 29 U.S.C. § 216(b). According to the City, if any Officers were denied pay for their earned overtime, it was due to unrelated instances of worksite- and supervisor-specific misconduct, rather than a single, Department-wide policy or practice.

The district court granted the City's motion for decertification and dismissed the Officers without prejudice to refiling their FLSA claims individually.¹ The original plaintiffs in the two decertified actions then reached settlements with the City on their own claims, and the district court entered final judgment. Although no longer plaintiffs at that point, the Officers filed timely appeals from final judgment, challenging their decertification and dismissal.

We are asked first whether the Officers can appeal a decertification order when they were dismissed from the collective action before final judgment and without prejudice to their individual FLSA claims. We hold that they can. Opt-in plaintiffs are parties to the collective action, and an order of decertification and dismissal disposes of their statutory right to proceed collectively. They therefore have standing to appeal and may do so after the interlocutory decertification order to which they are adverse merges with final judgment.

We are asked next whether the collective actions here were properly decertified and the Officers properly dismissed for failure to satisfy the "similarly situated" requirement of the FLSA. We hold that they were. Although the district court erred in its interpretation of the "similarly situated" requirement and in the standard it applied in evaluating decertification, a de novo review of the record reflects that the Officers failed, as a matter of law, to create a triable question of fact regarding the existence of a Department-wide policy or practice. In the absence of such a policy or practice, and in the absence of allegations of any other similarity of law or fact material to the disposition of the Officers' claims, the Officers were not "similarly situated" within the meaning of the FLSA.

I

Because much of this case turns on terminology and procedures specific to the FLSA, we begin with a brief explanation of 29 U.S.C. § 216(b) and the collective action mechanism that arises from it.²

The relevant language of section 216(b) is spare:

An action to recover the liability prescribed in [this subsection] may be maintained against any employer (including a public agency) in any Federal or State court of competent jurisdiction by any one or more employees for and in behalf of himself or themselves and other employees similarly situated. No employee shall be a party plaintiff to any such action unless he gives his consent in writing to become such a party and such consent is filed in the court in which such action is brought. ... The right provided by this subsection to bring an action by or on behalf of any employee, and the right of any employee to become a party plaintiff to any such action, shall terminate upon the filing of a complaint by the Secretary of Labor ....

29 U.S.C. § 216(b).

It is evident from the statute that workers may litigate jointly if they (1) claim a violation of the FLSA, (2) are "similarly situated," and (3) affirmatively opt in to the joint litigation, in writing. Id. It is evident also that the "right" to litigate jointly has two permutations: The statute refers to "[t]he right ... to bring an action by or on behalf of any employee," and to "the right of any employee to become a party plaintiff to any such action," id. —that is, the right to bring the collective litigation and the right to join it. But the statute specifies little else. It does not prescribe terms for the resulting proceeding. It does not provide a definition of "similarly situated," on which access to the collective mechanism typically turns. It does not establish a process for evaluating the propriety of a collective proceeding as litigation unfolds—for example, it makes no mention of "certification" or "decertification" of a collective action. And it says nothing about the standard the district court should apply when the collective mechanism is challenged.

Given these gaps, much of collective action practice is a product of interstitial judicial lawmaking or ad hoc district court discretion. In particular, although nothing in section 216(b) expressly compels it, it is now the near-universal practice to evaluate the propriety of the collective mechanism—in particular, plaintiffs' satisfaction of the "similarly situated" requirement—by way of a two-step "certification" process. See 1 McLaughlin on Class Actions § 2:16 (14th ed. 2017).³ As this process most often functions, plaintiffs will, at some point around the pleading stage, move for "preliminary certification" of the collective action, contending that they have at least facially satisfied the "similarly situated" requirement. See 1 McLaughlin on Class Actions § 2:16. Later, after the necessary discovery is complete, defendants will move for "decertification" of the collective action on the theory that the plaintiffs' status as "similarly situated" was not borne out by the fully developed record. Id.

We will address in subsequent sections the propriety of this two-step approach, as well as the proper means of evaluating whether plaintiffs are entitled to litigate in a collective action. As an initial matter, however, it is useful to address certain common misconceptions about the "preliminary certification" and "decertification" of collective actions.

As noted, neither "certification" nor "decertification" appears in text of section 216(b). The terms have instead been adopted from Federal Rule of Civil Procedure 23, which governs class actions in federal court. The underlying assumption of that appropriation seems to be that collective and class actions, which to a degree resemble one another, must be handled in procedurally parallel ways. That assumption is unfounded.

Collective actions and class actions are creatures of distinct texts—collective actions of section 216(b), and class actions of Rule 23 —that impose distinct requirements. See 7B Fed. Prac. & Proc. Civ. § 1807 (citing examples of cases so observing).⁴ The "expedient adoption of Rule 23 terminology with no mooring in the statutory text of § 216(b)" risks "inject[ing] a measure of confusion into the wider body of FLSA jurisprudence"—and has likely already done so. Symczyk v. Genesis HealthCare Corp. , 656 F.3d 189, 194 (3d Cir. 2011), rev'd on other grounds , 569 U.S. 66, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013).

"Preliminary certification" of an FLSA collective action—also known as "provisional" or "conditional" certification—is an example of the confusion sown by the Rule 23 analogy. The term "certification" calls to mind an affirmative decision by the district court, as in the Rule 23 context, to allow a collective action to go forward. See Fed. R. Civ. P. 23(c)(1)(A). Yet, unlike in the Rule 23 context, the district court in a collective action plays no such gatekeeping role. Preliminary certification in the FLSA context does not "produce a class with an independent legal status[ ] or join additional parties to the action." Genesis Healthcare Corp. v. Symczyk , 569 U.S. 66, 75, 133 S.Ct. 1523, 185 L.Ed.2d 636 (2013). "The sole consequence" of a successful motion for preliminary certification is "the sending of court-approved written notice" to workers who may wish to join the litigation as individuals. Id.

Given its purpose, preliminary certification may take place after the collective action has already begun. A collective action is instituted when workers join a collective action complaint by filing opt-in forms with the district court. See id. ; Rangel v. PLS Check Cashers of Cal. , 899 F.3d 1106, 1109 n.1 (9th Cir. 2018) ; Smith v. T-Mobile USA Inc. , 570 F.3d 1119, 1122–23 (9th Cir. 2009) ; Sandoz , 553 F.3d at 919 ; Morgan , 551 F.3d at 1259. Whether opt-in forms are filed after or before preliminary certification is thus entirely up to the workers joining the litigation; preliminary certification is "neither necessary nor sufficient for the existence of a [collective] action." Myers v. Hertz Corp. , 624 F.3d 537, 555 n.10 (2d Cir. 2010) (emphasis added).

"Decertification" is another appropriation—and another misappropriation—from the Rule 23 context. Again, the term implies that a district court has some threshold role in creating a collective action. But, once more, section 216(b) does not provide for any "certification" process...